DCIT, CC-1(1), KOLKATA, KOLKATA vs. ANIL KUMAR BHAIYA, DELHI

IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, KOLKATA SHRI DUVVURU RL REDDY, VICE PRESIDENT RAJESH KUMAR, ACCOUNTANT MEMBER

I.T.A. Nos. 2696/Kol/2025 (Assessment Year 2014-2015)

DCIT, Central Circle-1(1), Kolkata, Office of the Deputy Commissioner of Income Tax, Central Circle-1(1), Kolkata, R.No. 305, 3rd Floor, Aayakar Bhawan Poorva, 110, Shanti Pally, Kolkata - 700107 …..…...…………….... Appellant vs. Anil Kumar Bhaiya, J-123, Ashok Vihar, PH-I, (North West), Delhi - 110052 [PAN: ADEPB3736B] ……..…...…………….... Respondent

Appearances by: Assessee represented by : Shri Siddharth Agarwal, AR Department represented by : Raman Garg, CIT, DR

Date of concluding the hearing : 12.08.2026 Date of pronouncing the order : 30.10.2026 O R D E R Per Rajesh Kumar, AM

The present appeal filed by the Revenue arise from order dated 11.06.2025 passed u/s 250 of the Income Tax Act, 1961 (hereafter referred to as “the Act”) by the Ld. Commissioner of Income Tax (Appeals) Kolkata- 20 [hereafter referred to “the Ld. CIT(A)] for the Assessment Year 2014-15.

2 ITA No. 2696/Kol/2025 Anil Kumar Bhaiya the said loans of Rs.1,09,726/-, interest expenditure of Rs.29,65,759/- and Long Term Capital Gain of Rs.78,00,000/-. 3. The grounds raised by the Revenue are as under:- “1. That on the facts and circumstances of this case and in law, whether the Ld. ct in deleting the addition amounting to Rs.50,00,000/- made under section 68 of the Income-tax Act, 1961, on account of unsecured loans received by the assessee though the assessee could not prove the creditworthiness of the loan creditor and genuineness of the loan transaction. 2. That on the facts and in the circumstances of this case and in law, whether the Ld. CIT(A) is correct in deleting the addition of Rs.1,09,726/- pertaining to interest expenses claimed by the assessee on unsecured loan received from shell entities. 3. That on the facts and in the circumstances of this case and in law, whether the Ld. CIT(A) was justified in relying merely on routine confirmations and banking channel transactions, while ignoring the findings of the Investigation Wing and the Assessing Officer, statements recorded u/s.132(4) of the Act, financial credibility of the lender companies and other surrounding facts, which clearly established that the assessee has routed its own unaccounted money in the form of unsecured loan through accommodation entries. 4. That on the facts and circumstances of this case and in law, whether the Ld. CIT(A) was justified in deleting the addition of interest expenses of Rs.29,65,759/- and Long Term Capital Gains of Rs.78,00,000/-, when the assessee failed to submit any detailed documentary evidence during the assessment stage, thereby failing to establish the necessary facts to support such claims, and the Ld. CIT(A) ignored the Assessing Officer's statutory right to examine the documents and evaluate the sufficiency of the evidence, which is contrary to the principle laid down by the Hon'ble Supreme Court in the case of CIT vs. Calcutta Agency Ltd. (AIR 1951 SC 108) and Hon'ble Calcutta High Court in the case of S.R. Batliboi Associates vs. CIT (2015). 4. The brief facts of the case are that the assessee filed his return of income for the Assessment Year 2014-15 on 23.02.2015 declaring total income of Rs.14,76,320/- and capital loss of Rs.51,05,017/-. The return was selected for scrutiny and assessment was completed under section 143(3) of the Act on 27.10.2016 determining total income at Rs.17,39,876/-. During the course of the original assessment proceedings, the Assessing Officer had examined, inter alia, the unsecured loans, interest expenditure and the capital gain arising from sale of property. Subsequently, proceedings under section 148 were initiated. Notice under the erstwhile provisions of section 148 was issued on 16.04.2021. The assessee filed return of income in response thereto on 29.04.2021. Thereafter, notice under section 148A(b) dated 26.05.2022 was issued and the assessee filed his reply on 13.06.2022. An order under section 148A(d) was thereafter passed on 29.07.2022 and notice under section 148 was

3 ITA No. 2696/Kol/2025 Anil Kumar Bhaiya issued. The assessee filed return of income in response to the notice under section 148 on 30.08.2022. The reassessment proceedings were thereafter completed under section 147 read with section 143(3) of the Act on 31.05.2023 determining total income at Rs.1,76,15,361/-. In the reassessment, the Assessing Officer made addition of Rs.50,00,000/- under section 68 in respect of unsecured loans, Rs.1,09,726/- in respect of interest paid on the said loans, Rs.29,65,759/- in respect of interest expenditure relating to the Edelweiss loan and Rs.78,00,000/- on account of Long Term Capital Gain. 5. The issue relating to the unsecured loans arose on account of information received from the Investigation Wing relating to the Banka Group. The Assessing Officer referred to the statements of Shri Mukesh Kumar Banka recorded on 30.05.2018 and 19.07.2018 and treated the loans received by the assessee from M/s Premkunj Commosales Pvt. Ltd. and M/s Starwise Computers Pvt. Ltd. as accommodation entries. The assessee had received Rs.20,00,000/- from M/s Premkunj Commosales Pvt. Ltd. and Rs.30,00,000/- from M/s Starwise Computers Pvt. Ltd. The assessment records the following transactions: - (i) Rs.20,00,056/- received from M/s Premkunj Commosales Pvt. Ltd. on 20.01.2014; (ii) Rs.20,00,028/- received from M/s Starwise Computers Pvt. Ltd. on 19.12.2013; and (iii) Rs.10,00,055/- received from M/s Starwise Computers Pvt. Ltd. on 20.12.2013. 6. Thus, the total amount credited was Rs.50,00,139/-, against which the Assessing Officer made addition of Rs.50,00,000/- under section 68 of the Act. 7. Before the Assessing Officer and thereafter before the Ld. CIT(A), the assessee furnished documentary evidence relating to both the lenders. In the case of M/s Premkunj Commosales Pvt. Ltd., the assessee furnished PAN, Certificate of Incorporation, Memorandum and Articles of Association and Income Tax Return. In the case of

4 ITA No. 2696/Kol/2025 Anil Kumar Bhaiya M/s Starwise Computers Pvt. Ltd., similar documents were furnished. The assessee also furnished audited financial statements, confirmations and bank statements of the respective lenders. 8. It was further submitted that the net worth of M/s Premkunj Commosales Pvt. Ltd. was approximately Rs.21.93 crore against the loan of Rs.20 lakh and the net worth of M/s Starwise Computers Pvt. Ltd. was approximately Rs.34.22 crore against the loan of Rs.30 lakh. The assessee accordingly submitted that the amounts advanced to him were only a small part of the financial resources of the respective lenders. 9. The assessee also brought to the notice of the Ld. CIT(A) that reassessment proceedings for Assessment Year 2015-16 had been completed on 23.03.2022 and the returned income was accepted. The said assessment was also made pursuant to the investigation relating to the Banka Group and the corresponding transactions with the same lenders were accepted. 10. The Ld. CIT(A), after considering the assessment order and the submissions made by the assessee, noted that the assessee had furnished the relevant documentary evidence relating to the identity of the lenders, their financial statements, bank statements, confirmations and the transactions. The Ld. CIT(A) thereafter deleted the addition of Rs.50,00,000/-. 11. The ld. DR submitted that the Ld. CIT(A) was not justified in deleting the addition. It was submitted that the statements recorded during the investigation proceedings and the material collected by the Investigation Wing established that the lender companies were involved in providing accommodation entries. It was submitted that the Ld. CIT(A) had given undue importance to the banking transactions and confirmations without appreciating the surrounding circumstances.

5 ITA No. 2696/Kol/2025 Anil Kumar Bhaiya 12. The ld. DR further submitted that the assessee had failed to establish the creditworthiness of the lenders and genuineness of the transactions and that mere production of documents could not discharge the burden cast upon the assessee under section 68 of the Act. 13. The ld. AR further submitted that the Revenue had not brought on record any material showing that the assessee had paid cash to the lenders against the amounts received through banking channels. It was submitted that the statement of Shri Mukesh Kumar Banka and the general investigation material could not by itself establish that the particular amounts received by the assessee represented his own undisclosed money. 14. The ld. AR also relied upon the assessment order passed for Assessment Year 2015-16 dated 23.03.2022, wherein the corresponding transactions with the same lenders had been accepted. It was submitted that no material had been brought on record to distinguish the transactions of the year under consideration from those examined in the subsequent year. 15. We have heard the rival contentions and perused the material on record. The issue before us is whether, on the facts of the present case, the material brought on record is sufficient to sustain the addition of Rs.50,00,000/- under section 68 of the Act. It is noticed that the assessee had furnished the statutory documents of both the lenders. The identity and existence of M/s Premkunj Commosales Pvt. Ltd. and M/s Starwise Computers Pvt. Ltd. were supported by their PAN, Certificates of Incorporation, Memorandum and Articles of Association and Income Tax Returns. Their audited financial statements, confirmations and bank statements were also furnished.It is further noticed that the amounts were received through banking channels and the transactions were recorded in the respective books. The assessee had also furnished the details of the

6 ITA No. 2696/Kol/2025 Anil Kumar Bhaiya transactions and repayment of the loans along with interest. The material placed on record also shows that the amounts advanced by the two lenders were small in comparison to their respective net worth. The assessee had specifically brought these financial particulars on record before the Ld. CIT(A). We also find that the corresponding transactions with the same lenders in Assessment Year 2015-16 were considered by the Department and the returned income was accepted in the assessment completed on 23.03.2022. Such acceptance in another assessment year is not by itself conclusive, but in the facts of the present case it is a relevant circumstance, particularly when no distinguishing material has been brought on record by the Revenue. 16. The Coordinate Bench of this Tribunal in the case of ACIT vs. Delightful Estate Developers LLP, ITA No.2309/Kol/2024 & CO No.04/Kol/2025, order dated 04.03.2025, has also considered an issue arising out of the Banka Group investigation and examined the evidence relating to the particular transactions. The said decision also recognises the necessity of examining the transaction-specific material while considering an addition based upon investigation material. Considering the totality of the facts and circumstances of the case, we find that the assessee had furnished sufficient documentary evidence in respect of the identity of the lenders, their financial position and the transactions. The Revenue has not brought any specific material on record establishing that the amounts received by the assessee represented his own undisclosed money. We, therefore, find no reason to interfere with the order of the Ld. CIT(A) deleting the addition of Rs.50,00,000/- made under section 68 of the Act. Accordingly, Ground No.1 of the Revenue is dismissed. 17. Ground No.3 is connected with Ground No.1 and relates to the material relied upon by the Assessing Officer, including the

7 ITA No. 2696/Kol/2025 Anil Kumar Bhaiya investigation report, statements recorded during the investigation proceedings and the financial position of the lenders. Since we have already considered the said material while adjudicating Ground No.1 and have found that the same does not establish that the particular credits represented the assessee's own undisclosed money, no separate addition can be sustained on the basis of the same material. Accordingly, Ground No.3 of the Revenue is dismissed. 18. Ground No.2 of the Revenue relates to the deletion of addition of Rs.1,09,726/- on account of interest paid on the aforesaid unsecured loans. 19. It is noticed that the assessee had paid interest of Rs.34,521/- to M/s Premkunj Commosales Pvt. Ltd. and Rs.75,205/- to M/s Starwise Computers Pvt. Ltd., aggregating to Rs.1,09,726/-. The said interest related to the very loans which have been considered while adjudicating Ground No.1. 20. The Assessing Officer had treated the interest payment as consequential to the addition made on account of the unsecured loans. Since the addition of Rs.50,00,000/- has been deleted by us after considering the nature of the loan transactions, the consequential interest disallowance also cannot survive. 21. Accordingly, we find no reason to interfere with the order of the Ld. CIT(A) deleting the addition of Rs.1,09,726/-. Ground No.2 of the Revenue is dismissed. 22. Ground No.4 relates to the deletion of addition of Rs.29,65,759/- on account of interest expenditure and Rs.78,00,000/- on account of Long Term Capital Gain. 23. In respect of the interest expenditure, the assessee had claimed total interest of Rs.32,12,909/- relating to the loan against property obtained from Edelweiss. In the original assessment completed under section 143(3) on 27.10.2016, the Assessing Officer had

8 ITA No. 2696/Kol/2025 Anil Kumar Bhaiya examined the claim and had disallowed Rs.2,47,150/- as excessive/unreasonable. The balance amount of Rs.29,65,759/- was allowed in the original assessment. 24. In the reassessment proceedings, the Assessing Officer again called for details relating to the Edelweiss loan and, since according to the Assessing Officer the necessary documentary evidence was not furnished, the balance interest of Rs.29,65,759/- was disallowed. 25. The ld. DR submitted that the assessee had failed to furnish the documentary evidence during the reassessment proceedings and that the Assessing Officer was entitled to examine the claim independently. Reliance was placed upon the decision of the Hon'ble Supreme Court in the case of CIT vs. Calcutta Agency Ltd. and the other decision referred to in the departmental ground. 26. The ld. AR submitted that the issue had already been examined in the original scrutiny assessment. It was submitted that the Assessing Officer had specifically examined the interest claim and had made a disallowance of Rs.2,47,150/- out of the total claim, thereby allowing the balance amount of Rs.29,65,759/-. It was submitted that no fresh adverse material had been brought on record in the reassessment proceedings to show that the balance amount was not genuine. 27. We have heard the rival contentions and perused the material on record. It is not in dispute that the original assessment was completed under section 143(3) on 27.10.2016 and that the interest claim had been examined in the course of the said assessment. The Assessing Officer had made a specific disallowance of Rs.2,47,150/- and had allowed the balance amount of Rs.29,65,759/-. In the reassessment proceedings, no fresh material has been brought on record to establish that the balance amount of Rs.29,65,759/- was not genuine or was not incurred by the assessee. In our view, the issue was concluded in the assessement framed u/s 143(3) after

9 ITA No. 2696/Kol/2025 Anil Kumar Bhaiya making due enquiries cannot be raked up again and again by re- opening the asse\ssments, Ld. CIT(A) has righty held in view of the decision of Hon’ble Delhi High Court in the case of ATS Infrastructure Ltd. Vs ACIT 473 ITR 595 wherein in was held that very issue on the basis of which the re-assessement proceeds were initiated has been deleted, other additions/disallowances made are liable to be deleted. In the instant case, it is an admitted fact that the case was reopened on the ground of accommodation entry allegedly taken by the assessee in the guise of loan. The said addition already stands deleted by us. We, therefore, find no reason to interfere with the order of the Ld. CIT(A) deleting the addition of Rs.29,65,759/-. 28. The remaining issue under Ground No.4 relates to the addition of Rs.78,00,000/- under the head Long Term Capital Gain. 29. The assessee had sold an immovable property for Rs.78,00,000/-. Against the said sale consideration, the assessee had claimed indexed cost of acquisition of Rs.83,68,920/- and indexed cost of improvement of Rs.45,36,097/-, aggregating to Rs.1,29,05,017/-. Consequently, the assessee had returned Long Term Capital Loss of Rs.51,05,017/-. 30. The return of income had been subjected to scrutiny assessment under section 143(3) and the returned capital loss had been accepted. In the reassessment proceedings, the Assessing Officer did not allow the indexed cost of acquisition and indexed cost of improvement and took the same at Nil. The entire sale consideration of Rs.78,00,000/- was accordingly assessed as Long Term Capital Gain. 31. The ld. DR submitted that the assessee had failed to furnish the necessary documentary evidence in support of the cost of acquisition and improvement during the reassessment proceedings and, therefore, the Assessing Officer was justified in making the addition.

10 ITA No. 2696/Kol/2025 Anil Kumar Bhaiya 32. The ld. AR submitted that the cost of acquisition and improvement related to earlier years and the same had already been disclosed in the return and considered in the original assessment. It was submitted that there was no finding of the Assessing Officer that the cost claimed by the assessee was fictitious or that the property had been acquired without any cost. 33. We have heard the rival contentions and perused the material on record. It is noticed that the assessee had disclosed sale consideration of Rs.78,00,000/- and had claimed indexed cost of acquisition of Rs.83,68,920/- and indexed cost of improvement of Rs.45,36,097/-. The Assessing Officer has not brought any material on record to establish that the cost of acquisition claimed by the assessee was fictitious or that the cost of improvement was not incurred. The action of taking the cost at Nil was based upon the non-production of the supporting documents during the reassessment proceedings. We further notice that the issue relates to the acquisition and improvement of the property in the earlier period and the assessee had disclosed the relevant computation in the return of income. The original assessment had been completed under section 143(3) after due enquiries and no adverse inference was drawn in the original assessement order. In the facts of the present case, the action of the Assessing Officer in taking the cost of acquisition and improvement at Nil, without bringing any material to establish that the claimed costs were not genuine, cannot be sustained. We further hold that the very issue in respect of which the re-assessement proceedings were initiated has been deleted , other addition/disallowance are also liable to be deleted. We, therefore, find no reason to interfere with the order of the Ld. CIT(A) deleting the addition of Rs.78,00,000/-.

11 ITA No. 2696/Kol/2025 Anil Kumar Bhaiya 34. The grounds raised by the Revenue in respect of the interest expenditure of Rs.29,65,759/- and Long Term Capital Gain of Rs.78,00,000/- are accordingly dismissed. 35. In the result, the appeal of the Revenue is dismissed. Order pronounced on 30.10.2026

Sd/- Sd/- (DUVVURU RL REDDY) (RAJESH KUMAR) (VICE PRESIDENT) (ACCOUNTANT MEMBER) Kolkata, Dated: 30.10.2026 Sudip Sarkar, Sr.PS